The Fed’s rate decision is imminent—what should we watch for next?
At 2 a.m. on October 29, the Fed will announce whether it will raise interest rates. As we all know, this has a significant impact on Bitcoin, gold, and U.S. stocks, and the market is paying close attention. Will rates go up, and what would the impact be?
1. Since Warsh explicitly said during an IMF event that he would not prejudge the outcome of the meeting, the market interprets this as meaning that a rate hike is not currently being pushed for. However, the risk of a hike remains, as inflation is still relatively high: U.S. CPI was up 3.7% year over year in September, while PPI was up 6.3%. International crude oil prices have also remained high for a long time and are showing signs of potentially rising above $100 again, which could fuel inflation. As a result, the market puts the probability of a rate hike at close to 50/50.
2. If there is no rate hike in October, the probability of one in December will rise. Even if the timeline is pushed back, expectations of a rate hike remain in the market. The result is that, whether or not rates are raised this month, Bitcoin, gold, and U.S. stocks will face pressure in the medium term. An unexpected hike could trigger panic selling and a sudden market crash.
3. From 87k down to 79.7k, the 50% Fibonacci retracement level is 83.5k. Last night, the price hit close to that level, so shorting at 83.2k was reasonable. If the market continues to move sideways, the next level to watch is around 81k; if that level breaks, we could see new lows. Personally, though, I lean toward a sideways market. A one-way move may not come this soon, and is more likely around the end of the month, before or after the rate decision.
4. As for the broader trend, I still expect a deep pullback. This current correction from the highs has not been very large in magnitude or long in duration. On that basis, if the bull market is to continue, the conditions for a second wave to begin still seem insufficient.
5. My personal estimate is that the pullback could bottom around 72,500 for Bitcoin and around 2,150 for Ethereum. Once the pullback is over, the second wave will begin. #BTC
At 2 a.m. on October 29, the Fed will announce whether it will raise interest rates. As we all know, this has a significant impact on Bitcoin, gold, and U.S. stocks, and the market is paying close attention. Will rates go up, and what would the impact be?
1. Since Warsh explicitly said during an IMF event that he would not prejudge the outcome of the meeting, the market interprets this as meaning that a rate hike is not currently being pushed for. However, the risk of a hike remains, as inflation is still relatively high: U.S. CPI was up 3.7% year over year in September, while PPI was up 6.3%. International crude oil prices have also remained high for a long time and are showing signs of potentially rising above $100 again, which could fuel inflation. As a result, the market puts the probability of a rate hike at close to 50/50.
2. If there is no rate hike in October, the probability of one in December will rise. Even if the timeline is pushed back, expectations of a rate hike remain in the market. The result is that, whether or not rates are raised this month, Bitcoin, gold, and U.S. stocks will face pressure in the medium term. An unexpected hike could trigger panic selling and a sudden market crash.
3. From 87k down to 79.7k, the 50% Fibonacci retracement level is 83.5k. Last night, the price hit close to that level, so shorting at 83.2k was reasonable. If the market continues to move sideways, the next level to watch is around 81k; if that level breaks, we could see new lows. Personally, though, I lean toward a sideways market. A one-way move may not come this soon, and is more likely around the end of the month, before or after the rate decision.
4. As for the broader trend, I still expect a deep pullback. This current correction from the highs has not been very large in magnitude or long in duration. On that basis, if the bull market is to continue, the conditions for a second wave to begin still seem insufficient.
5. My personal estimate is that the pullback could bottom around 72,500 for Bitcoin and around 2,150 for Ethereum. Once the pullback is over, the second wave will begin. #BTC